After reading some excessively convoluted arguments both for and against “net neutrality”, I realized there is a simple analogy, with - oddly enough - Ted Stevens for inspiration.

The internet carries bits between consumers (you and me) and services (Google, Yahoo, MySpace, etc.). When traveling across the internet, bits are bits. To the big internet carriers (like AT&T) the bits all look the same - that is unless the carriers spend extra money and add extra equipment (and slow down traffic) to examine the bits as they go flying past.

Bits on the internet are paid for on both ends - the services pay the carriers to put bits on the Internet, and consumers pay to get bits off the internet. Since services ultimately derive all their income from consumers (directly or indirectly), we could simplify this to say that consumers pay for the bits they get off the internet. Part we pay directly in fees to our internet provider, and part we indirectly through service subscriptions, and in the cost of goods we buy (those advertised through services).

Think of the big internet carriers like bunch of water companies. In our analogy imagine that the water comes from some inexhaustible supply, and the water companies just own the pipes. One day the water company guys get a little grumpy, because a lot more water is running through their pipes, but they are not making more money. They notice that consumers are taking a lot of baths, and the soap companies are making a lot of money. To boost their revenue they decide to end “water neutrality”. The water company guys want to install equipment to monitor how you are using your water, and what brand of soap you use. Their plan is to blackmail the soap companies. If your soap company does not pay up, then when you go to take a bath, all you get is a trickle. If the soap company does pay up, you end up paying more for your soap.

In our imaginary scenario, the water company guys are betting that you won’t blame them for higher soap prices. In the real world, the carriers are hoping consumers won’t notice when they get fewer or slower services.

The odd part of all this is that in fact there are plenty of pipes. In the 1990’s, the big carriers went a bit nuts and laid a lot of fiber - so there is far more capacity than is used. The carriers spent a lot of money, but because there is excess capacity, the prices for bandwidth are dropping radically.

For consumers this is a great deal, as with falling prices on bandwidth, the services offered on the internet just keep getting faster and better. The carriers are a bit less excited.

The other joker is that most of the big carriers are also telephone companies. The telephone companies get a lot of income off a service (phone calls) that costs a lot less than they charge. There are a bunch of smaller companies that sell telephone service across the Internet, at much lower prices. If you were a telephone company guy, you would really want to block off the cheaper service … before it kills your cash cow.

When asked about this, the answer from the carrier guys boils down to: “Who me? I would never do anything like that!” … while at the same time seeking new laws so that they can.

“Net Neutrality” is simply telling the carriers to stick to the business of moving bits, and to stay out of the blackmail business. To the consumer “net neutrality” means more and better services on the Internet for the same price.

… and that’s pretty much it.